Bank Stock Loans Make a Big Impact
Correspondent banking is a growing part of Bell State Bank & Trust, and bank stock loans are a big part of that business. The loans help community banks expand through mergers and acquisitions, maintain healthy balance sheets, provide capital for growth and plan for the future. Bank stock loans are also helpful in buying back investor shares or accommodating an Employee Stock Ownership Plan purchase of shares. Bell also finances individual investors’ purchases of holding company stock.
Callie Schlieman, senior vice president of correspondent banking for Bell State Bank & Trust, has worked on numerous bank stock loans.
“My favorite part is talking to the bankers about the different industries their communities serve and the different risks and success stories in their local economy,” she said. “I also like digging into the bank’s numbers, which tell the story of the bank. It’s fun watching bank acquisitions and synergies take place and seeing a bank grow and succeed.”
Callie has been with Bell for 10 years and worked in the industry 15 years.
“I used to be a bank examiner, so I’ve been working with bank presidents and executives my entire career,” she said. “Bank numbers and the banking industry are second nature to me. It’s what I do.”
What do banks need to know about taking out a holding company loan?
It’s a really easy process. We’re flexible, and there isn’t a one-size-fits-all product. We want to tailor something that best fits the holding company and the bank’s balance sheet, strategy and cash flow that works within our parameters as well. We always go in with a flexible mindset. We want to make it work for them while it still meets reasonable risk parameters.
How does a bank qualify for the loan?
We get traditional banking reports that management uses to monitor the bank’s loan portfolio, liquidity and interest-rate risk, but overall, a lot of the information that we review comes from public data filed in the bank’s call report.
Can a holding company qualify if a bank is underperforming?
If a bank is underperforming, we are still interested in discussing a loan with them. We will visit with the bank CEO or chief financial officer to help them set goals that will get them to a position where they qualify for a loan that meets our criteria.
What might banks not realize about this process?
We really like to get to know management and strive to have someone on our team meet them in person no matter how many miles away the bank is. We always want to understand your bank, the risk profile of your bank, what keeps you up at night, and what your goals are for the future.
We’re here to partner with you and understand how your bank works, what products you offer and if we have any products here at Bell that can benefit you. For example, we can originate all loan types to insiders to alleviate Regulation O concerns and accommodate investor and employee stock purchases.
What is a typical time frame?
The process is pretty harmless and quick partially due to the fact that so much data is publicly available. We have employees dedicated to doing bank stock loans. We like to visit the banks in person, but sometimes we can underwrite remotely over phone conversations depending on the borrower’s time frame.
We can move quickly with all decisions made locally in Fargo.
How long are the loans, typically?
Usually we like to keep the amortization around 12 years, but if a bank projects growth and they need an interest-only period ahead of the 12 years, we’re flexible.
We offer both variable and fixed-rate options with a typical loan term ranging from 12 months to five years.
Where are your customers located?
We focus on the Midwest, but if the bank is sound and well-performing, we are always willing to work with borrowers outside of the Midwest.
Bell State Bank & Shortening its name to Bell Bank
Bell State Bank & Trust will shorten its name this summer to Bell Bank, simplifying the brand while retaining the familiar “trees” logo.
“This transition represents another significant milestone in our company’s mission and growth,” said Michael Solberg, president and CEO of the independently owned, Fargo-based company. “Particularly as we expand in new markets and new lines of financial business, it is time to simplify and unify the Bell brand.”
“The name ‘Bell Bank’ retains the essence of our company’s roots, while encompassing who we are, what we offer and why we’re unique,” Solberg observed.
While Bell has gone through several name changes during its 50-year history, the company’s local ownership, service and reputation have stayed constant, Solberg said.
“Our company’s true legacy is our unchanging commitment to people and to the values we live every day,” he said. “We will remain a Fargo-based, independently owned bank for years to come.”
Founded in 1966 as State Bank of Fargo, Bell has grown from a single location at Northport Shopping Center in Fargo to one of the nation’s 25 largest independently owned banks, with 20 locations in eastern North Dakota, Minnesota lakes country and the Twin Cities metro area.
In 2011, State Bank & Trust purchased Bell Mortgage, founded in 1880 by early Minneapolis leader David C. Bell, and began expanding in the Twin Cities. The bank added the more unique “Bell” moniker to its name in 2012.
Today, Bell has nearly $4 billion in bank assets, and more than $4.5 billion in assets under management through its wealth management division.
Bell Anniversary Featured as Magazine Cover Story
Bell State Bank & Trust was featured on the cover of Minneapolis-based NorthWestern Financial Review in June for celebrating our 50th
anniversary this year.
The story shows how Bell’s people-focused strategy of prioritizing employees and the communities we serve has contributed to the company’s growth.
The article also detailed other success factors, such as lending, correspondent banking and wealth management.
While the magazine article stated, “Growing banks with solid performance in the billion-dollar-plus asset group are among the most attractive in the banking industry for acquirers,” the story also pointed out that Michael Solberg, the bank’s president and CEO, and Richard Solberg, the board chairman, are adamant that the bank is not for sale.
Read the story here